Business Owners Write Off Everything, Right?

It’s often misunderstood that business owners get to “write off” 100% of their business expenses. When you do the math, these write offs only equate to 15-25% of the actual cash spent on equipment, office supplies, insurance, etc.

For example, if a business owner buys a tool for $100, they have to pay full price for the tool (which is money they made from sales) and gets a 15-25% expense write off at the end of the year. In this situation, the business owner saves $15 to $25 on that tool based on the tax bracket their personal income fits into.

So next time you hear someone say business owner’s get to “write everything off”, only certain items are able to be written off and only a percentage of said item.